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By Angelo S. Samonte Reporter
THE World Bank plans to borrow
money through the sale of peso-denominated bonds or IOUs, according
to a Department of Finance official.
The lender is eyeing to float
P5-billion worth of the debt papers to fund its lending program in
the Philippines.
Finance Undersecretary Roberto
Tan, who is also the acting national treasurer, said the lender
plans the debt paper-sale this year.
“[The] World Bank’s plan to
issue this kind of bonds is an indication of creditors’
confidence in the local currency,” he said, adding that the
domestic climate is conducive for a bond issuance.
Tan said earlier that besides the World Bank, the International
Finance Corp. (IFC) is also planning to issue similar bonds to fund
its projects in the Philippines and abroad. The bond sale is
likewise scheduled for this year.
Tan said the World Bank and the
IFC could conduct the bond float either through a private placement
or a public auction, using the facility of the Bureau of the
Treasury. World Bank is one of the Philippine government’s biggest
creditors, along with the Asian Development Bank and the Japan Bank
for International Cooperation.
The IFC is an arm of the World
Bank that provides lending to the private sector.
Multilateral agencies usually do
not issue bonds denominated in pesos, Tan said and this will be the
first time the IFC will conduct such a float. The World Bank and ADB
had issued peso bonds before, he said.
Under its fiscal program, the
government is set to borrow $2.466 billion from foreign creditors,
and P260 billion from domestic sources to plug its budget deficit
and pay off debts that will fall due this year.
Of the foreign-borrowing program,
$1.466 billion would come in the form of official development assistance
(ODA) from bilateral and multilateral agencies like the World Bank.
Loans in the form of ODA are concessional in nature and therefore
charges interest rates that are lower than commercial rates.
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